Five Questions About: Help to buy


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The Independent Online

Is this the government's housing market boost?

Yes, the second stage of the scheme launched this week as banks finally published details of their deals. To date, only the government-backed banks have announced rates, with RBS and NatWest already taking applications and the Halifax due to start next week.

Why haven't any other banks signed up?

The scheme was originally due to be extended in january but the Tories pulled forward plans, possibly catching some banks on the hop. HSBC, Barclays and Santander have announced they will join the scheme by then, but have yet to publish details of what their offering will be.

How does it work?

The government offers a guarantee of 15 per cent of the loan to the lender making it easier for them to lend.

Is it good for borrowers?

Moneyfacts reckons that anyone borrowing £20,000 could cut their monthly costs by more than £100 than if they went for a best buy 95 per cent mortgage outside the scheme.

Will it lead to trouble?

Critics say the scheme will fuel a housing bubble. Treasury Secretary Danny Alexander said: "People who think that there's a housing bubble should get out more."

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